— in favour of government, contract shows

THE Government of Guyana on Saturday released the CGX Resources Inc Production Sharing Agreement (PSA) signed in 2013 by then President Donald Ramotar on behalf of Guyana and Dr Edris K. Dookie, on behalf of CGX Energy Inc.
The PSA in its entirety, along with appendices, has been uploaded to the websites of the Ministry of Natural Resources and the Department of Public Information.

The release of this PSA comes nearly two months following the release of the PSA between ExxonMobil’s subsidiary Esso Exploration and Production (EEPGL) in December 2017. The release of that agreement had followed months of agitation by civil society, the opposition and the free press, calling for the agreement to be made public in the interest of transparency and accountability.

At the time of the ExxonMobil contract release, a commitment was made to release not only all petroleum contracts, but also those in the other natural resources sectors.
A press release from the Ministry of Natural Resoures said that the other petroleum agreements will be released in the coming weeks and months in similar fashion.

The agreement sets out a one percent royalty to be paid out of government’s share of the production and a production-sharing arrangement of 53 per cent for the Government of Guyana and 47 per cent for the operator. The EEPGL PSA features a 50/50 production-sharing split after cost oil – or the monies spent by the investor in exploration — is deducted. It also showed an improvement from the one per cent royalty paid by government to a two per cent royalty paid by the operator.

CGX Resources Inc, a Canadian oil and gas exploration company, holds three licences in the Guyana-Suriname Basin. Its offshore concessions include the Corentyne, Berbice and Demerara concessions and through ON Energy Inc, it holds an onshore concession. CGX Resources Inc had in December 2017 announced new work commitments related to its Guyana exploration. Among them were the drilling of exploratory wells on all three offshore concessions between 2020 and 2023.

In June 2000, CGX was doing exploration work offshore Guyana when Suriname gunboats forced the jack-up drill rig from the Eagle 1 well location.
The matter was taken to the International Tribunal on the Law of the Sea (ITLOS) and on September 20, 2007, it ruled in favour of Guyana